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21 September, 05:48

The closing price of a stock is quoted at 32.08, with a P/E of 21 and a net change of 36. Based on this information, which one of the following statements is correct?

a. The current earnings per share equal $32.08/21 + $36.

b. The earnings per share have increased by $.36 this year.

c. The current stock price is equivalent to 21 years of the firm's current earnings per share.

d. The closing price on the previous day was $.36 higher than today's closing price.

e. A dealer will buy the stock at $32.08 and sell it at $32.44 a share.

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  1. 21 September, 06:25
    0
    c. The current stock price is equivalent to 21 years of the firm's current earnings per share

    Explanation:

    PE ratio = market price/EPS

    market price = EPS*PE ratio

    = EPS*21

    Therefore, The current stock price is equivalent to 21 years of the firm's current earnings per share
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